HUMMER On Hold Until GM Seals The Deal

January 14, 2010
Angular Front Exterior View - 2008 HUMMER H3 4WD 4-door SUV Alpha

Angular Front Exterior View - 2008 HUMMER H3 4WD 4-door SUV Alpha

It's official: at the end of this week, General Motors is sending HUMMER to the bench. Spokesman Nick Richards said that GM will stop producing new HUMMER vehicles until the brand's sale to Sichuan Tengzhong Heavy Industrial Machinery Company is finalized. Once that milestone has been reached, GM's Shreveport plant in north Louisiana will resume production of the H3 and H3T models, which the current agreement allows Shreveport to do through 2011, with an option to continue production through 2012 (even though GM plans to shutter the facility in 2011). The H2 will roll from GM's plant in Mishawaka, Indiana.

Richards wouldn't comment on the state of negotiations, except to say that the U.S. government has signed off on all related regulatory issues. Several other things could be holding up the deal -- the two most important being (a) Sichuan Tengzhong securing ample credit and (b) wariness on the part of the Chinese government. While the first is almost guaranteed, the second is fairly certain, too: even though China has big dreams of economic growth, and even though manufacturers like Sichuan Tengzhong are desperate to gain a foothold in Western auto markets, China's government is still getting the hang of this capitalism thing. The country's dedicated bureaucrats are likely hunched over the agreement right now, scrutinizing every P and Q (or their Mandarin equivalents).

If you'd asked us a year ago about the viability of this arrangement, we would've probably been hugely optimistic, but after seeing Saturn and Saab bite the dust, and after watching GM have so many issues around the sale of Opel, we're not holding our breath. So what happens if the deal goes belly-up? There seem to be three basic possibilities:

1.  GM could continue searching for a buyer (perhaps BAIC could get its act together?).

2.  GM could shutter the brand and save it for a rainy day (as the company seems to be doing with Pontiac).

3.  GM could continue HUMMER production with a drastically reduced lineup.

We're leaning toward option #2 -- because it seems both smarter and more likely -- but we're not completely sold on it. Feel free to convince us otherwise in the comments below.


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